Early Call On Chicago

04/05/11 -- The overnight grains closed mixed, mostly lower but well off session lows, with beans down 4-6c, wheat down 3-7c and corn up one to down a quarter.

Crude is around half a dollar easier and the USD is setting fresh lows against many of the major currencies. Outside markets like metals are also mostly lower.

There aren't too many changes in fundamentals. Corn planting is well behind and although the outlook for the Midwest is warmer it also comes along with further rain.

Current weather conditions are more bullish for corn and wheat than they are for later planted beans.

In addition South American soybean production estimates keep creeping up, and Chinese buying interest - such as it is - appears to be switching down there too.

Tomorrow's weekly export sales report could be more important than usual following a dismal showing from corn and beans last week, more of the same could encourage further fund liquidation regardless of market fundamentals.

There is now some fairly widespread chatter of funds picking up their bat and ball and looking elsewhere for a new cash cow. Almost regardless of what the fundamentals say that would mean lower prices too.

In the US, anti-ethanol voices are getting louder. In the EU there is also finally talk questioning the green credentials of biofuels.

US ethanol production figures out later today could be vital for funds still holding significant volumes old crop corn.

China's weekly soybean auction attracted no bids.

Tunisia is shopping for 50,000 MT of optional origin milling wheat, excluding Russian/Ukraine shit.

The market still feels toppy to me, and due another downside correction. Will it be today, tomorrow of Friday?

Early calls don't suggest that it will be today at this stage: corn mixed, beans down 4-6c and wheat 3-5c lower.